Indian equities down for fourth straight week (Weekly Roundup)

Mumbai, June 14 (IANS) It was another eventful trading session on India’s equity markets during the week ended Friday when in three out of the five days the key sensitive index (Sensex) of the Bombay Stock Exchange (BSE) ended in the red. The week started on a negative note with Sensex touched its lowest level this year due to rising fuel prices and high inflation. With the central bank also hiking its short-term lending rates Wednesday, the market ended with fourth straight week of losses.

Some sanity was restored Thursday when data on index of industrial production showed a seven percent jump in April, against 3.9 percent in March, which slightly boosted the confidence of investors.

The BSE Sensex declined 382.56 points, or 2.45 percent, at 15,189.62 when the week ended even as the Nifty of National Stock Exchange (NSE) lost 110.70 points, or 2.39 percent, at 4,517.10 points.

“For the markets, inflation data is a major cause of worry. It’s not only a local phenomenon, it has now become a global issue,” said Asish Poddar, a research analyst with Almondz Global Securities.

“Uncertainty among the investors will persist for some time till the inflation cools down. Moreover, with rupee weakening against dollar, the FIIs are exiting equity markets,” Poddar told IANS.

Dipon Mehta, director of the Mumbai-based brokerage firm Dipon Shares and Stock Brokers, said all now depended on the crude oil prices and that the mood in overseas markets will drive the domestic bourses next week.

“Monsoon alone can’t drive the Sensex. There are other variables such as inflation, interest rates which will play an important role locally to decide the course of the market.”

According to the market regulator Securities and Exchange Board of India (SEBI), Indian equities market attracted $938.50 million from the foreign institutional investors (FIIs) over the week.

The first trading session of the week turned out to be another “Black Monday” as the surging oil prices created a mayhem and triggered a 506.08-point crash of the Sensex - a drop of 3.25 percent - at 15,066.10 points.

The falling trend continued next day, as weakness in global markets once again weighed heavily on the domestic bourses. The key index lost 176.85 points, or 1.17 percent, in the process.

Both the Sensex and the Nifty also hit their lowest levels in 2008.

The market made a smart recovery Wednesday as investors resorted to bargain buying after recent steep fall in share prices - a trend that also continued the next day despite initial hic-cups.

Friday again saw the market dip lower, as inflation surged to a seven-year high. The 30-share BSE Sensex declined 60.58 points, or 0.40 percent, while the Nifty shed 22.25 points, or 0.49 percent.

While the country’s largest private sector firm Reliance Industries rose by 1.29 percent at Rs.2,268.30, the largest drug-maker Ranbaxy Laboratories surged 11.86 percent after the promoters decided to sell their entire stake to a Japanese firm., Daiichi Sankyo.